Improving Your Credit Score Can Lower Insurance Costs
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UPDATED: Sep 24, 2020
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Your credit score plays an important part in determining what your rates will be for insurance policies. In many ways, insurance is like a line of credit, and your credit score is the indicator used to show how well you manage the different lines. By repairing your credit score, you open up possibilities for savings in all types of insurance, not to mention improving your ability to qualify for loans or other lines of credit.
Credit Scores and Insurance
Insurance companies use your credit to determine how well you can be counted on to pay your premiums on time, among other things. With a credit score of higher than 650, the amount of risk you pose to the insurance company begins to go down, and the higher your score is, the lower your resulting premiums will be. When you compare insurance quotes, the insurance company will run your credit score to see where it is at that particular point in time. If your score only recently went down, then your current coverage might be the cheapest. Likewise, if you have recently improved your credit score, you may find that you’re able to get much cheaper insurance rates.
Reducing Costs with Multiple Policies
All types of insurance use your credit score to help determine what your premiums will be. Life insurance, home or renters insurance, even your car and health insurance are based on how well you can be expected to pay your premiums in a timely manner. However, if you have more than one policy with the same company, such as a life and home policy, you can get a discount for having multiple policies, which could offset the penalties for having less than perfect credit.
Where to Begin Credit Repair
If you want to bring your credit score up, the first place to go is your own credit history. Look for items that are incorrect and report such findings to all three credit bureaus. Make it a point to always pay your bills on time, and pay more than the minimum amount on your credit cards. It may help to hire a financial advisor to help you get out of debt and regain a good credit score. If you choose this method, research the advisors before you hire them, looking for past successes or complaints, such as those which might be filed with the Better Business Bureau.